3 Energy Stocks Pushing Industry Growth

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

One out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 28.89 points (-0.2%) at 17,362 as of Monday, Nov. 3, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,832 issues advancing vs. 1,201 declining with 150 unchanged.

The Energy industry as a whole closed the day down 1.1% versus the S&P 500, which was unchanged. Top gainers within the Energy industry included Sonde Resources ( SOQ), up 4.6%, PostRock Energy ( PSTR), up 4.2%, Mexco Energy ( MXC), up 3.0%, Forbes Energy Services ( FES), up 4.2% and Samson Oil & Gas ( SSN), up 2.2%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

Forbes Energy Services ( FES) is one of the companies that pushed the Energy industry higher today. Forbes Energy Services was up $0.12 (4.2%) to $3.00 on average volume. Throughout the day, 41,450 shares of Forbes Energy Services exchanged hands as compared to its average daily volume of 29,900 shares. The stock ranged in a price between $2.80-$3.01 after having opened the day at $2.80 as compared to the previous trading day's close of $2.88.

Forbes Energy Services Ltd., an independent oilfield services contractor, provides a range of well site services for oil and natural gas drilling and producing companies to develop and enhance the production of oil and natural gas in the United States. Forbes Energy Services has a market cap of $61.5 million and is part of the basic materials sector. Shares are down 11.9% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Forbes Energy Services a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Forbes Energy Services as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk.

Highlights from TheStreet Ratings analysis on FES go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 92.8% when compared to the same quarter one year ago, falling from -$0.78 million to -$1.49 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, FORBES ENERGY SERVICES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for FORBES ENERGY SERVICES LTD is rather low; currently it is at 24.34%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.32% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $1.56 million or 73.02% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 2.21 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, FES has managed to keep a strong quick ratio of 2.40, which demonstrates the ability to cover short-term cash needs.

You can view the full analysis from the report here: Forbes Energy Services Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

At the close, PostRock Energy ( PSTR) was up $0.03 (4.2%) to $0.75 on average volume. Throughout the day, 20,088 shares of PostRock Energy exchanged hands as compared to its average daily volume of 26,300 shares. The stock ranged in a price between $0.71-$0.75 after having opened the day at $0.72 as compared to the previous trading day's close of $0.72.

PostRock Energy Corporation, an independent oil and gas company, is engaged in the acquisition, exploration, development, production, and gathering of crude oil and natural gas. PostRock Energy has a market cap of $22.5 million and is part of the basic materials sector. Shares are down 37.9% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate PostRock Energy a buy, no analysts rate it a sell, and none rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates PostRock Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on PSTR go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 187.0% when compared to the same quarter one year ago, falling from $6.88 million to -$5.99 million.
  • Currently the debt-to-equity ratio of 1.62 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.43, which clearly demonstrates the inability to cover short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 51.66%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 276.92% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, POSTROCK ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • POSTROCK ENERGY CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, POSTROCK ENERGY CORP continued to lose money by earning -$0.93 versus -$3.99 in the prior year. This year, the market expects an improvement in earnings (-$0.60 versus -$0.93).

You can view the full analysis from the report here: PostRock Energy Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Sonde Resources ( SOQ) was another company that pushed the Energy industry higher today. Sonde Resources was up $0.00 (4.6%) to $0.07 on heavy volume. Throughout the day, 115,784 shares of Sonde Resources exchanged hands as compared to its average daily volume of 47,700 shares. The stock ranged in a price between $0.06-$0.09 after having opened the day at $0.06 as compared to the previous trading day's close of $0.07.

Sonde Resources has a market cap of $4.3 million and is part of the basic materials sector. Shares are down 89.9% year-to-date as of the close of trading on Friday.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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